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Tuesday, July 12, 2011

Netflix Inflation

Netflix today announced a new pricing structure today that has already caused a ruckus on the web. If you are a Netflix subscriber you are sure to be unhappy about a roughly 50% – 60% increase in cost of your movie rental plan. The only people that will be happy about this change will be some Netflix shareholders, Amazon and Apple.

Here’s a rundown of the new plan basics (ignoring Blu-ray costs):

Basically what Netflix has done here is build in a flat cost for unlimited streaming of movies at $7.99. If I used streaming even once a month I might consider that, but only my daughter uses that service so…. I’ll stay with the one-out-at-a-time service for $7.99 plus the Blu-Ray premium with no streaming. It’s still not that bad of a deal folks, but yes if you use streaming at all, this is a hefty increase if you’re in the sweet spot of 1-3 DVD’s out at a time. One thing not being talked about much by the other bloggers is the fact that the price has gone down if you’re a heavy (6-8 DVDs at a time) user. While some are so upset at the cost increase that they’re cancelling Netflix, I’ll stay with them for now. I agree with what Richard Lawler of EngadgetHD:

I wouldn’t be surprised if Netflix doesn’t move to offer discounts or additional revisions in their offerings soon. They are trying to cover their costs of acquiring more streaming rights and make a plentiful profit along the way without losing too much of their subscriber base. It’s much easier to play around with these things when your main competition (Blockbuster) is mostly gone. Thank goodness for Redbox and others…

What are you doing with your Netflix subscription? Any changes in store?